Tax advice: family business incentives

Many entrepreneurs are attracted to the incentives of the family business. They wonder how interesting this type of society is and how they can benefit their family thanks to its opportunities.

If you own shares in a company, you must ensure that they meet the requirements to take advantage of the incentives designed for family companies.

Family business requirements

To take advantage of the incentives , you must meet the requirements set by the Tax Agency. Remember that if you do not comply, you could be fined. Don’t take the legality lightly.

But let’s get into the matter. The requirements to be able to take advantage of the family business incentives are:

• Have 5% of the capital individually or have 20% of the capital jointly with your spouse, ascendants, descendants or second-degree collateral.
• A member of your family or you must at a minimum receive remuneration as a manager that represents at least 50% of their earnings from work and the economic activities carried out.
• More than 50% of the company’s assets must be, without excuses, assigned to economic activities. Otherwise, it cannot be used.
• Be over 65 years old. To take advantage of the incentives of the family business, it is mandatory to have exceeded that age. All those who pass it can apply for the incentives.

Without meeting these requirements, it will be impossible for you to take advantage of the advantages of the family business. If, on the other hand, you do comply, you can take advantage of what we tell you below.

Advantages of a family business

The advantages that you can obtain thanks to the family business are two:

• Wealth Tax Exemption: one of the most controversial taxes for entrepreneurs. Without a doubt, the exemption is an advantage that alone would be enough of a claim.
• ISD reduction: another of the most complicated in this country. The comings and goings of this tax confuse who should file it. Its reduction marks a before and after. This is an attractive advantage that you will surely appreciate properly.

As you can see, they are exciting advantages that you should not miss. There is a vital point that you must know to have all the information you need.

Assets not assigned

The incentives only apply to the company’s value corresponding to assets related to the economic activity it carries out. In the case of assets not affected by the exemption and reduction, they must be applied to the part of the company’s value that corresponds to the rest of the assets.

Conclusions

Family business incentives are exciting, and can benefit from them if you meet all the requirements. Remember that trying to apply them without complying with all the fine print can lead to unnecessary tax fines.

Wanting to be clever is a bad idea, but failing to take advantage of the Tax Agency’s advantages would not demonstrate great intelligence either. Typically ignorance works against us, and we should not let that happen.

We try with our posts to ensure that you have all the necessary information so that you can benefit. Your work is vital, and we want you to get the maximum return. We bet on you.

Has it become more apparent to you? Are you going to take advantage of the advantages of the family business?